Feds clear way for transfer of Amos and Mitchell to ApCO - Beckley, Bluefield & Lewisburg News, Weather, Sports

Feds clear way for transfer of Amos and Mitchell to ApCO

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In its petitions for West Virginia and Virginia approval to transfer parts of the Amos and Mitchell coal-fired power stations from Ohio subsidiaries to Appalachian Power, AEP announced May 1 that federal regulators have no objection.

The Federal Energy Regulatory Commission approved transfer to Appalachian Power of AEP Ohio's two-thirds ownership, or 867 megawatts, in the John Amos plant and half of its ownership of the 1,600-MW generating capacity of Mitchell Plant, the company said in a media release.

Appalachian Power filed in December with the Public Service Commission of West Virginia seeking approval to purchase those parts of the Amos and Mitchell power plants from AEP Ohio.

The purpose of the proposed generation transfer, the company said, is to meet the demand of its ratepayers when AEP's existing power pool — in which subsidiaries buy and sell power among themselves — is dissolved in January 2014.

The proposed purchase, amounting to perhaps $1.4 billion, would increase Appalachian Power's generation capacity by 1.6 gigawatts.

A similar plan filed with the commission in November by FirstEnergy that would transfer coal-fired assets from an Ohio subsidiary to Mon Power also has the go-ahead from FERC.

The federal agency was not expected to stand in the way of these transactions because they will not change the parent companies' market positions.

AEP's and FirstEnergy's Ohio subsidiaries are undergoing electricity market deregulation; critics of these proposals note that transfer of coal-fired assets subject to increasing environmental regulation to West Virginia's regulated market would shield them from competition with cheaper natural gas-fired generation and would guarantee the utilities a return on their investments at the expense of ratepayers.

Intervenors in both cases say alternative fuels and energy efficiency have not been adequately considered and point out that utilities in other states are diversifying their generation portfolios to hedge their dependence on coal.

Because Appalachian Power also serves Virginia customers, AEP will need approval not only of the Public Service Commission of West Virginia but also the Virginia State Corporation Commission.  

Evidentiary hearings are scheduled in both cases in the coming months; follow docket number 12-1655 for Appalachian Power or 12-1571 for Mon Power on the PSC's website.